Friday, September 2, 2011

Stay in School Kids! Royalty Statement breakdown time....

I just took a look at my latest mechanical royalty statement related to "At Sixes And Sevens" 
I am earning $.06 per single download and $.10 per album download.
Reflected in the latest statement, it shows that some nice folks (thank you!)  have downloaded or bought 18 copies of the album, and 30 single song downloads.
Which nets this: TOTAL = $11.03

I still owe SubPop $278.68 for the advance given to make the record, so this $11.03 goes towards that.
At this rate, I will have to sell 4,645 more single song downloads or 2,786 full albums to earn $278.68 and be "in the black", and start making money from sales of the album.

Then, (at the same rate used above) for: 
100 sold copies of the full album I will receive $10.00, or 
100 downloaded singles I will receive $6.00

I have no precise idea of what SubPop's wholesale prices to retail stores are, but its likely to be more than $10 per CD, so my conjecture on what subpop's profit might be is:
100 CD X $10 = $1000. vs. $10.00 for me. 

I have no idea what labels makes from selling thru online venues like iTunes, and not one artist who I have asked about this knows either. 

I have no right to complain, I signed this deal with my own hand, but it is an interesting and perhaps enlightening breakdown of how things can work money wise when making recordings for a record label.  

AND >>> I am not bagging on SubPop particularly, just trying to illustrate thru my own experience how things can break down money-wise in the long term for the artist when they are lucky enough to get a "record deal". SubPop gave me money that allowed me the time and resources to make the record, and that was a great service to me at the time! 
If you are ever doing business with anyone at anytime about anything and someone answers your question with: "thats just how it works" or "Its a standard deal" for your life!!!!


  1. I've heard that those with a college degree tend to use a better pen.


  3. For what its worth i bought 6s and 7s a few years ago and its still one of my go to albums, never realised how poor your royalties were for this seen as how you made it all yourself. You deserve much more for such a great record

  4. I have a masters degree and no job, maybe that cheers you up a bit. It's a shame you don't make more money from this (doesn't touring around the world with sebadoh help?), but please don't stop making music!

  5. I think you're being far too charitable. I've very little knowledge of the music 'business', but as an outsider looking in, the relationship between label and artist seems parasitic to me...

  6. I think the most important thing you say is, "I have no right to complain, I signed this deal with my own hand".

    The music industry is bulging with stories of how people have been "ripped off" but at the end of the day, they agreed to it in the first place. It's been happening for decades and is widely publicised and known. How did you fall for this with all this information available?

    You could have borrowed $278.68 to record the album and hired a reputable PR company to do the labels legwork, that's your only costs, the rest you can do yourself (I've been doing this for over 10 years). Even borrowed at a high interest rate, which would be pretty stupid, isn't half as stupid as what you've signed up to here.

  7. It's actually quite a reasonable mechanical royalty rate. What was your Artist Royalty rate? Don't forget if the RRP is $9.99 (as it seems to be on iTunes US today) the PPD or Wholesale Price is around $7.62. SubPop's net receipts may be less than this as iTunes will take their various cuts for tax, potential distribution, profit, etc.

    If SubPop's actual receipts are $7 and you're receiving $1 based on your calcs above, that's around a 14% Net Receipts royalty on mechanicals.

    I'm guessing SubPop will also have to account to other songwriters, producers, mixers? They might have incurred promo, marketing, initial digital distribution charges?... All in all I guess I'm saying the actual profit margin for labels isn't as much as many people think.

  8. Not wanting to play devil's advocate, but... A label is more than a bank. It has a promo team, distribution, connections to get releases abroad and business development people.

    If you are a touring band, I would genuinely recommend doing everything yourself to see what it entails and then maybe approaching a label if it's too much work or if you are under-achieving. The key is to keep contact with your audience.

  9. an artist on average makes 10% of every dollar spent on their music through itunes, and that's if the album is posted without electronic distribution through a soundscan registered record label. There are different deals brokered on an label to label basis with itunes outlets, some of the better I have seen are close to 25% of the dollar. I choose to give away my solo stuff for free. That model works better these days. from a music collective capacity I have earned almost $5000 this year (all profit, which is more than I can say for most traditionally signed bands I know) But hell, if I were doing this to make ends meet, I'd be dead by now.

    Speaking of:

    You can download all of these bands for free, if your into this sort of thing. I play as My Pal Dragon.